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MNCs’ HRM Strategy and Country of Origin Effect: Do North American, European and Japanese Firms Really Differ?

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  • Gyu-Chang Yu

    () (Hanyang University, School of Business)

  • Woo-Sung Park

    (Kyunghee University)

  • Yung-Ho Cho

    (Ajou University)

Abstract

Based upon the sample of 419 MNCs’ subsidiaries in Korea, we examined the country of origin effect in the choice of MNCs’ HRM strategy: transplantation, localization, and mixed. A multinominal logit regression analysis showed that there is an important country of origin effect in the choice between a localization strategy and a mixed strategy. North American MNCS tended to implement mixed strategy, while Japanese MNCs tended to adopt localization strategy. European MNCs were in the middle. The estimated log odds of choosing a localization strategy over a mixed strategy by Japanese subsidiaries were 1.79 times higher than European subsidiaries and 2.85 times higher than N. American subsidiaries; those by European subsidiaries were 1.59 times higher than N. American subsidiaries. However, the country of origin was not significantly related to the choice between a transplantation strategy and other strategies. We also examined two alternative factors influencing the HRM strategy of foreign subsidiaries: investment strategy and entry strategy. The implications of this and directions for future research are discussed.

Suggested Citation

  • Gyu-Chang Yu & Woo-Sung Park & Yung-Ho Cho, 2007. "MNCs’ HRM Strategy and Country of Origin Effect: Do North American, European and Japanese Firms Really Differ?," management revue. Socio-economic Studies, Rainer Hampp Verlag, vol. 18(4), pages 392-409.
  • Handle: RePEc:rai:mamere:doi_10.1688/1861-9908_mrev_2007_04_yu
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    Keywords

    Country of Origin; HRM Strategy; Localization; MNCs; South Korea;

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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